Grayscale Distributes Ethereum Staking Rewards to ETHE Shareholders

Grayscale’s distribution marks a definitive break from the previous design of U.S. spot crypto exchange-traded products, which were structured solely to track price movements and explicitly avoided direct interaction with network functions like staking. This cautious approach reflected the regulatory uncertainty that had long surrounded whether staking rewards—a core source of economic return for proof-of-stake networks like Ethereum and Solana—could be integrated into products governed by U.S. securities law. The turning point came in October of last year, when guidance from the U.S. Treasury and the IRS provided greater clarity on the tax treatment and regulatory handling of such rewards for crypto ETPs.

U.S. Treasury Secretary Scott Bessent stated at the time that the guidance created “a clear path to stake digital assets and share staking rewards with their retail investors.” This regulatory inroad empowered Grayscale to become the first U.S. issuer to enable staking on its Ethereum products shortly thereafter, setting the stage for Monday’s historic distribution. The move is governed by the Securities Act of 1933, which focuses on disclosure requirements for public offerings rather than imposing ongoing management rules on funds. By distributing the rewards, Grayscale is testing a critical thesis: whether protocol-level income can be delivered within a ’33 Act-compliant product without triggering the additional, more stringent obligations that apply to registered investment companies.

The specific distribution covers staking rewards earned by the ETHE product from October 6, 2025, through the end of the year. Shareholders of record as of January 5 received a payment of $0.083178 per share, which was payable on Tuesday. This tangible financial benefit directly addresses a previous gap in the value proposition of U.S. crypto ETPs, which had excluded this native yield while investors holding assets directly in wallets could earn it. Grayscale CEO Peter Mintzberg framed the development as beneficial not only for the firm but for “the entire Ethereum community and ETPs at large,” suggesting it enhances the attractiveness and utility of regulated investment wrappers for crypto assets.

The implications of this precedent are profound for the future of crypto asset management. If successful, this model could be replicated for other proof-of-stake assets, fundamentally reshaping how they are packaged for mainstream, regulated investment. It moves the product category beyond speculative price exposure to include a yield-generating component, aligning regulated products more closely with the inherent economics of the underlying blockchain networks. This evolution could attract a new cohort of income-seeking investors to the crypto ETP space, who were previously deterred by the inability to access staking yields through a familiar, regulated vehicle.

Grayscale’s action establishes a potential new blueprint for the industry. Prior to this, the exclusion of staking was a design choice made to navigate the complex U.S. regulatory landscape. The recent guidance and Grayscale’s subsequent execution demonstrate a path forward for integrating core blockchain functionalities into securities law frameworks. This integration is crucial for the maturation of crypto markets, as it allows regulated products to more fully represent the financial reality of the assets they hold.

The focus now shifts to the market’s reception and any further regulatory response. The distribution is a live test of the structure’s viability under the Securities Act of 1933. Its success could prompt other asset managers to follow suit, potentially leading to a competitive landscape where staking yield becomes a standard feature of spot products for proof-of-stake cryptocurrencies. For Ethereum and the broader ecosystem, this represents a significant step toward deeper integration with traditional finance, validating a key revenue model of proof-of-stake networks within the world’s most stringent capital markets regime.